“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The investment philosophy practiced by Warren Buffett calls for investors to take a long-term horizon when making an investment, such as a ten year holding period (or even longer), and reconsider making the investment in the first place if unable to envision holding the stock for at least five years. Today, we look at how such a long-term strategy would have done for investors in O’Reilly Automotive, Inc. (NASD: ORLY) back in 2010, holding through to today.
| Start date: | 12/16/2010 |
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| End date: | 12/15/2020 | ||||
| Start price/share: | $63.04 | ||||
| End price/share: | $449.08 | ||||
| Starting shares: | 158.63 | ||||
| Ending shares: | 158.63 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 612.37% | ||||
| Average annual return: | 21.68% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $71,229.35 | ||||
As shown above, the ten year investment result worked out exceptionally well, with an annualized rate of return of 21.68%. This would have turned a $10K investment made 10 years ago into $71,229.35 today (as of 12/15/2020). On a total return basis, that’s a result of 612.37% (something to think about: how might ORLY shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more piece of investment wisdom to leave you with:
“While it might seem that anyone can be a value investor, the essential characteristics of this type of investor-patience, discipline, and risk aversion-may well be genetically determined.” — Seth Klarman
